JAY PEAK: The 2008 AlpineZone Ski Area Challenge

[Tin Woodsman]

tw--let me try and get this one started, here, in the present and thanks for the good questions.

{snip}
1,000 more units is what we've been permitted for through the Master Plan process. Whether or not this gets built out will be entirely predicated on business levels, the economy and a host of other factors that all dot lines back to the sustainability of our entire business. 57 units in the new Hotel, maybe a 120 in the new Hotel Jay. We've also been permitted for roughly 200 home sites across the footprint of the golf-course so those are included in that number as well. My best guess (this is Bill speaking so use your mind's eye); roughly 12 perfect years before you see that kind of build out here, if at all.

To be clear, is that the build out for the 200 units plus the hotel projects or the entire 1000?

The WB, according to Bill again, is expected to be finished (and by finished he means ski/ride-able) within three years. As I'm sure you understand, and this is me talking, sticking your neck out with a number like this gives the boo-birds plenty to crow at when it takes 4- so if it were me, I wouldn't be saying that but I'm just the marketing guy. Do with that what you will.

Someone (not me) will surely hold this projection over your head when it's not done in year 3. :dunce:

And completely agreed about the essential bigness of this. Definitely a little scary for all of us. I think the process in which we'll be phasing it in takes some of the bite off of it. Without question, how we're paying for this takes an enormous burden away which, in reality, is at the heart of why most that take too big a bite end up put away wet (after being ridden hard). Operational costs, in large part, can be scaled; debt payments can't. You quote Sugarloaf but it's really the entire ASC package that was a not-so-shining example of too-much-too-fast-too-da-loo... For instance, it wasn't the operational costs that made the Grand Hotels less-than-feasible-it was the debt associated with their construction. Running them at 70% occ on an annualized basis was enough to keep them neutral. Paying for their build out with the equiv of a Chase Visa rate? Notsomuch.

A few quick follow ups.

1) What happens if construction costs continue to escalate? Do the equity investors get diluted (either via a cash call or more investors) or does Jay Peak (presumably as general partner) take the risk?

2) I understand that's sensitive (this one will be too), so if you don't answer, not surprising. More broadly, are the ownership groups for the individual projects different than that for the resort as a whole? To what degree is there overlap in that structure?

3) I was speaking about the pre-ASC incarnations of the Loaf, but your point re: ASC is certainly a similar cautionary tale writ gynormous. Nonetheless, equity investors have an expected rate of return too - it's not free money.

To your last question, I think you're absolutely right; the key (esp for a mtn-centric spot like JP) is keeping your collective eye on the mountain product and recognizing it as the growth driver at the resort. Of course the definition of on-mtn- improvements does need to evolve past snowmaking and lift upgrades. Skier services, more room to spread out in the base lodge, better parking and even better ticket concourses all play a major role in keeping skiers/riders, even corps skiers and riders, happy.

I'm sure I've missed lots here so just let me know and I'll try my best to readdress. The other questions I'll take in the official forum but we can continue this one in the here and now if you'd like.

Thanks

OK, here's where I have my most substantial comments. I think it's fair to include skier services et.al in the definition of on-mountain. I think only pure real estate is a separate category that unfortunately gets lumped into press releases about "improvements". Other than potential buyers (a small subset of your customers) no one gives a damn.

But I digress... I've been concerned for some time now over the draft plans in the West Bowl. You have as many as three high speed quads (or possibly six packs) slated for that area. The chief concern has to be the lift that will off-load at the shoulder where the summit of the Flyer is. Aside from exposing that lift to the Freezer's notorious wind issues, you will now be doubling the number of skiers coming onto that area at any given time. How do you plan to deal with the crowding and deterioration in snow surfaces that is likely to ensue? Goat Run is a mess already and it's reasonably likely that Northway and Ullr's will suffer the same fate. Are high speed quads here and elsewhere in the WB really the answer?

Second, are there any long term plans to adjust the early/late season schedule? It doesn't seem that the Jet/State side area gives you much of an advantage other than a singular compact area to focus on. Any chance of moving the shoulder season operations to a more favorable location - perhaps the aforementioned new lift from the WB to the Freezer shoulder? I think that would face pretty much due North and would bottom out around 2200-2300' if my eyeballing the plans is correct.

Thanks for your refreshingly frank, honest and open responses. They stand in stark contrast to the pablum we are spoon fed from other resorts in VT that shall remain nameless.

 

[56fish]

Steve,

How come Rick has an exclusive at August West? Bobbin Mill players would be great for flatland home-owners and locals alike.:beer:

 

[Sky]

Steve, love the responses and the associated candor.

Three questions...one already asked (just looking for clarification).

1) Other Mountain Passes: I ski @ Waachusett. They participate in the Mountains of Distinction program (discounted tix @ participating resorts). Jay has (to my knowledge) always participated. It appears, based on your earlier responses) that you are continuing to do so.

2) Associated (loosely)...any plans to offer incentives due to the commuting costs? I'm thinking "Carload Days" (like Ragged) or 2nd day increased discount (like Wildcat)?

3) Maybe I did the "sped-red" thing cuz I didn't quite get the full picture, but the lodging plans...are those hotel rooms (as in for rent) or condos (as in for sale)...or both?

I'd love to ski Jay...it's just on the long-ish commute vs more southerly fare/bang-for-buck (ski vs drive that is). So I'm looking for ways to make it worth my while (aside from the terrific terrain etc).

Thanks

Sky

 

[Steve@jpr]

Not an exclusive-just an old-time relationship with him. Plus the Bobbin-millers (who are great) don't cover GD (at least from what I know of them) and that's sort of the whole direction of the Fest. We found a great Old and in the Way-type band but they just backed out. We're adding another group to the schedule this year-to go along with Rick. It'll be fun.

Steve,

How come Rick has an exclusive at August West? Bobbin Mill players would be great for flatland home-owners and locals alike.:beer:

 

[Steve@jpr]

Thanks for the questions Sky.

1--Yes, we will continue participating.

2--We did a program last year whereby we actually paid for your gas (actually knocked off $100 in recognition of what a r/t may cost) when you booked a 4-night stay. I'm guessing, at minimum, I'll put together some lodging based discount that will tie-into gas. We may have some day-based discounts on tap as well, though nothing in stone as of yet.

3--Both. Those 1,000 dwelling units are a combination of Hotel rooms, parcels of land, and condominiums. Any lodging we put up ourselves will be almost all of the warm-bed variety, ie, avail for rent.

Steve, love the responses and the associated candor.

Three questions...one already asked (just looking for clarification).

1) Other Mountain Passes: I ski @ Waachusett. They participate in the Mountains of Distinction program (discounted tix @ participating resorts). Jay has (to my knowledge) always participated. It appears, based on your earlier responses) that you are continuing to do so.

2) Associated (loosely)...any plans to offer incentives due to the commuting costs? I'm thinking "Carload Days" (like Ragged) or 2nd day increased discount (like Wildcat)?

3) Maybe I did the "sped-red" thing cuz I didn't quite get the full picture, but the lodging plans...are those hotel rooms (as in for rent) or condos (as in for sale)...or both?

I'd love to ski Jay...it's just on the long-ish commute vs more southerly fare/bang-for-buck (ski vs drive that is). So I'm looking for ways to make it worth my while (aside from the terrific terrain etc).

Thanks

Sky

 

[Steve@jpr]

To be clear, is that the build out for the 200 units plus the hotel projects or the entire 1000?


Someone (not me) will surely hold this projection over your head when it's not done in year 3. :dunce:
(Yes, I know. And I appreciate the fact, b'leeve me, that it won't be you...) Following responses in parentheses)


A few quick follow ups.

1) What happens if construction costs continue to escalate? Do the equity investors get diluted (either via a cash call or more investors) or does Jay Peak (presumably as general partner) take the risk?

(Again, understand that this isn't a traditional investor/partner relationship by any stretch. Construction costs are locked in by virtue of contracts. We've built over-run situations into the body of those contracts with caps set at varying percents. In the event that we have some wonderful idea (that would add costs incremental to the contract), Jay Peak would be on the hook for it.

2) I understand that's sensitive (this one will be too), so if you don't answer, not surprising. More broadly, are the ownership groups for the individual projects different than that for the resort as a whole? To what degree is there overlap in that structure?

(There's no overlap whatsoever between capital investors and those that have assumed ownership-save the aforementioned 'wonderful-idea scenario'. The funds generated for cap are from our EB-5 Foreign investor program)

3) I was speaking about the pre-ASC incarnations of the Loaf, but your point re: ASC is certainly a similar cautionary tale writ gynormous. Nonetheless, equity investors have an expected rate of return too - it's not free money.

(It's as close to free as the government will allow actually. These folks investing on the EB-5 program get no rate of return as they aren't getting their liquid investment back per se; it buys them (and their family) a green card-and nets them a piece of fractional lodging-that's their return and, as such, there's no built in rate associated.)



OK, here's where I have my most substantial comments. I think it's fair to include skier services et.al in the definition of on-mountain. I think only pure real estate is a separate category that unfortunately gets lumped into press releases about "improvements". Other than potential buyers (a small subset of your customers) no one gives a damn.

(You'll have to look awfully hard to find us talking about condo living and associated real estate additions in the same breath as improvements. At least any that we generate or support with soundbites.)

But I digress... I've been concerned for some time now over the draft plans in the West Bowl. You have as many as three high speed quads (or possibly six packs) slated for that area. The chief concern has to be the lift that will off-load at the shoulder where the summit of the Flyer is. Aside from exposing that lift to the Freezer's notorious wind issues, you will now be doubling the number of skiers coming onto that area at any given time. How do you plan to deal with the crowding and deterioration in snow surfaces that is likely to ensue? Goat Run is a mess already and it's reasonably likely that Northway and Ullr's will suffer the same fate. Are high speed quads here and elsewhere in the WB really the answer?

(Nope, they aren't. That's why the latest plans calls for one (potentially) hsq and maybe a recycled fixed grip Triple. It's entirely possible, even probable, that it will be only two lifts out there with one, at most, being an hsq. It's 100% that there will be no more than that. One lift would be a stand alone, the other would get folks access in/out.)

Second, are there any long term plans to adjust the early/late season schedule? It doesn't seem that the Jet/State side area gives you much of an advantage other than a singular compact area to focus on. Any chance of moving the shoulder season operations to a more favorable location - perhaps the aforementioned new lift from the WB to the Freezer shoulder? I think that would face pretty much due North and would bottom out around 2200-2300' if my eyeballing the plans is correct.

(Don't altogether discount the net positive of having one self-contained, compact area to focus on w/respect to late-season.. That being said, I could possibly see the WB being the late season choice but the orientation of the trail system probably won't lend itself to holding snow very well (imho here). The trails will not face due North, they'll face S/SE and, well, you know how that is.

I'm actually ok with Stateside being the solution. I think the big victory is that going forward, we're are going to push it as hard as we can every season. It takes very little to turn a profit late season-albeit small-but if you've configured your operations correctly, priced yourself accordingly and use pr/marketing/word of mouth, it 'aint rocket science. If catering to skiers and riders is at all part of your brand, and you're not busy pushing it, then you're missing it. Lots of smart operators out there though, so maybe we're the ones missing it, who knows.)

Thanks for your refreshingly frank, honest and open responses. They stand in stark contrast to the pablum we are spoon fed from other resorts in VT that shall remain nameless.

(Thanks for the feedback but I've got more latitude to talk than many-given who I report to. Lots of tongues are tied out there in hack-land, believe me.)

 

[from_the_NEK]

But I digress... I've been concerned for some time now over the draft plans in the West Bowl. You have as many as three high speed quads (or possibly six packs) slated for that area. The chief concern has to be the lift that will off-load at the shoulder where the summit of the Flyer is. Aside from exposing that lift to the Freezer's notorious wind issues, you will now be doubling the number of skiers coming onto that area at any given time. How do you plan to deal with the crowding and deterioration in snow surfaces that is likely to ensue? Goat Run is a mess already and it's reasonably likely that Northway and Ullr's will suffer the same fate. Are high speed quads here and elsewhere in the WB really the answer?

(Nope, they aren't. That's why the latest plans calls for one (potentially) hsq and maybe a recycled fixed grip Triple. It's entirely possible, even probable, that it will be only two lifts out there with one, at most, being an hsq. It's 100% that there will be no more than that. One lift would be a stand alone, the other would get folks access in/out.)

So you're saying this...

...really isn't in the cards anymore. I made this rough sketched up layer in Google Earth based on the 2003 "Resort Expansion Study" map and my imagination. I figured the West Bowl would never get built out to that extent. However, it would be cool if an updated planned expansion map was released. Is there any sort of revised map release planned for the near future, or do we have to wait until the trails start getting cut? :smile:

 

[Steve@jpr]

Yes, I would consider any hard data from the 2003 plan to be somewhat dated at this point. I would also expect an updated map as we inch closer.

So you're saying this...

...really isn't in the cards anymore. I made this rough sketched up layer in Google Earth based on the 2003 "Resort Expansion Study" map and my imagination. I figured the West Bowl would never get built out to that extent. However, it would be cool if an updated planned expansion map was released. Is there any sort of revised map release planned for the near future, or do we have to wait until the trails start getting cut? :smile:

 

[Sky]

10-4.

One quick f/u ....

HEH! When I first saw this...I errraahhhh...took it the wrong way.

Steve, thanks for the laugh.

 

[Tin Woodsman]

Quote:


(Don't altogether discount the net positive of having one self-contained, compact area to focus on w/respect to late-season.. That being said, I could possibly see the WB being the late season choice but the orientation of the trail system probably won't lend itself to holding snow very well (imho here). The trails will not face due North, they'll face S/SE and, well, you know how that is.

I'm actually ok with Stateside being the solution. I think the big victory is that going forward, we're are going to push it as hard as we can every season. It takes very little to turn a profit late season-albeit small-but if you've configured your operations correctly, priced yourself accordingly and use pr/marketing/word of mouth, it 'aint rocket science. If catering to skiers and riders is at all part of your brand, and you're not busy pushing it, then you're missing it. Lots of smart operators out there though, so maybe we're the ones missing it, who knows.

I was actually referring to the lift in your 2003 plan that was supposed to run from the WB base area to the shoulder where the Flyer off loads. That would face almost due North and would be self-contained as well, while providing you with an elevation advantage. Regardless, I suppose if you're going to make the commitment with the snowmaking firepower you have on the Jet and Haynes, then it's probably not a huge difference in the long run.

BTW, what is Jay Peak's philosphy from both a technical and economic standpoint on the Low-E and fan guns we see proliferating elsewhere? Have I just not been paying attention, or has Jay Peak been somewhat quiet in this regard?

 

[JPTracker]

Steve,

This summer you are replacing all the cables on the Tram. I noticed that trees along the edge of Interstate, which are under the Tram cables have been removed widening Interstate. This continued up Lower & Upper Quai.

Why was this done and were trees also removed above Northway going up the Face toward the Tram house?

 

[JPTracker]

Steve,

I noticed that your season passes are now for sale on the Web Site but you can not purchase them on line. Also your on line reservation system is also closed.

Will the reservation system remained closed until the web site is up? When can we expect the new site to be up and what can we expect from it that will be different.

 

[Steve@jpr]

jpt--can't purchase them online yet as we're transition our pos system (Sirius) from MSSI to here--an enormous and enormously painful project. Our goal is to have online sales, the new website and reservation sales all available 1 August.

Now back to that work...

Steve,

I noticed that your season passes are now for sale on the Web Site but you can not purchase them on line. Also your on line reservation system is also closed.

Will the reservation system remained closed until the web site is up? When can we expect the new site to be up and what can we expect from it that will be different.

 

[SnowRider]

Jay Peak is well known for its glades, snow, steeps, etc. However with the edition of these new condos and upgraded base area I am assuming you are trying to attract more than just the hardcore skiers.

That being said does Jay have anything planned to try and increase the quality of the "cruisers" or "family trails" on the mountain? (planting trees, fences to block wind...) I know many blue trails are well known for being wind-swept.

How do you plan on catering to the new crowd of skiers you may draw? Is the West Bowl going to be focused on intermediate terrain?

Overall the question here is how will you cater to everyone in the new families you are bringing in.

 

[Steve@jpr]

Depends on your definition of hardcorps. Ours revolves around skiing/snowboarding being the primary focus during your vacation. To that end we definitely tilt toward expert/advanced and, to be perfectly honest, I don't see that orientation changing in any dramatic way. We certainly need more intermediate terrain but I don't see that being configured until West Bowl comes online.

Jay Peak is well known for its glades, snow, steeps, etc. However with the edition of these new condos and upgraded base area I am assuming you are trying to attract more than just the hardcore skiers.

That being said does Jay have anything planned to try and increase the quality of the "cruisers" or "family trails" on the mountain? (planting trees, fences to block wind...) I know many blue trails are well known for being wind-swept.

How do you plan on catering to the new crowd of skiers you may draw? Is the West Bowl going to be focused on intermediate terrain?

Overall the question here is how will you cater to everyone in the new families you are bringing in.

 

[56fish]

Not an exclusive-just an old-time relationship with him. Plus the Bobbin-millers (who are great) don't cover GD (at least from what I know of them) and that's sort of the whole direction of the Fest. We found a great Old and in the Way-type band but they just backed out. We're adding another group to the schedule this year-to go along with Rick. It'll be fun.

:beer: Coolness!! Appreciate the response!

 

[GrilledSteezeSandwich]

Do you guys still accept canadian money at par???

 

[kcyanks1]

Do you guys still accept canadian money at par???

The better question is whether they accept US money at par.

 

[GrilledSteezeSandwich]

The better question is whether they accept US money at par.

LOL..Back in the day..when I was in college..I would just go to the bank and buy in Canadian exactly what a lift ticket cost at Jay Peak. It was around $40 back then so only about $27 US.

Does Jay Peak still serve Poutine and big cans of Canadian Beer in the cafeteria next to the Tram?

 

[tcharron]

LOL! Somehow it seems that these threads are turning into a rebelion against Greg.